Salam,

IFG article (link below) states this test as “Net Liquid Assets = Total Assets – (Tangible Fixed Assets + Inventory) – Liabilities” but then uses cash instead.

- Which one is correct? The formula or cash or both?
- My assumption is that the test is trying to get to the liquid assets number given it’s title - basically the cash plus short term investments. However the formula above doesn’t get you to that number (example below). Is the term “Net Liquid Assets” just an “inaccurate term”?

Cash | 1 |
---|---|

Stock | 2 |

Debtors | 3 |

Tangible Fixed Assets | 4 |

Intangible Fixed Assets | 5 |

Tot Assets | 15 |

Tot Liabs | 10 |

Net Liquid Assets | -2 |